Asked to comment on the eventuality of a rebirth of the South Stream gas pipeline, Energy Union Vice President Maroš Šefčovič yesterday (31 May) voiced doubts that the project would be commercially viable in the first place.

On a visit to Sofia on 27 May, Energy Commissioner Miguel Arias Cañete said that the EU executive was supporting the construction of a gas hub in the country, and that Russian gas could also feed such an infrastructure. This prompted comments in the Bulgarian press that the European Commission no longer objects to the South Stream pipeline project, designed to bring Russian gas to Europe across the Black Sea, to the Bulgarian port of Varna. South Stream (see background).

The visit of Russian President Vladimir Putin to Greece, which took place that same day, was widely expected to clear the way for another attempt to reinvigorate South Stream, or to create another version of it. Russia wants to build the Poseidon pipeline, which is seen as a direct competitor to the offshore section of the Trans-Adriatic pipeline (TAP), which is part of the EU-favoured Southern Gas Corridor.

It seems that Poseidon is the new name of the latest mega-project to bring Russian gas to Southern Europe. The previous versions were dubbed “South Stream” (to Bulgaria) and “Turkish Stream” (to the European territory of Turkey). However, the route of Poseidon remains unclear.

It looks, however, like the Greek Prime Minister Alexis Tsipras hasn’t met the expectations of the Russian side, and no announcements concerning Poseidon were made during Putin’s visit to Greece.

EXCLUSIVE / Athens is not planning to advance talks on the Russia-backed Poseidon pipeline, seen as a direct competitor to the EU-backed TAP pipeline, during a forthcoming visit of Russian President Vladimir Putin’s to the country.

EurActiv.com asked Šefčovič what the Commission’s position would be in the event that a new version of South Stream is proposed.

Šefčovič expressed doubts that the project would be commercially viable. He said that each time he was questioned on possible big future pipeline projects, he was reverting to the basic question of how much gas Europe needs. With the help of all the stakeholders, including the member states and suppliers, he said that according to the European Commission, in 2030 the EU would need from 380 to 450 billion cubic meters (bcm) of gas, which is basically the same amount which is used today.

Šefčovič also said he had invited the International Energy Agency and transmission system operators to estimate what is the most cost-efficient way to transport gas. He said that this would bring additional perspective to the debate.

He also stated that in the executive’s view, for the energy security of the member states, the recipe was not mega-projects, but better interconnectors, which would guarantee that each one of them would have access to at least three sources of gas.

The Commission Vice President added that the Southern gas corridor, which will bring Caspian gas to Europe by 2020, was in an advance stage of implementation, and that this particular project is of particular interest for South Eastern Europe.

“We are supporting the gas hub creation in Bulgaria by technical assistance, by different feasibility studies, but we are also highlighting that first you need to have an appropriate supply of gas, you need to have an appropriate legislation in place, you need to have appropriate acceptance of gas operators and the interest of your neighbours to trade in your gas,” he said.

Regarding Putin’s visit to Greece, Šefčovič highlighted that this visit was preceded by “huge delegations” from a number of member states for a “ground-breaking ceremony” marking the beginning of the construction of the Trans-Adriatic pipeline (TAP).

Greece on Tuesday (17 May) launched construction on a 550-kilometre section of the Trans-Adriatic Pipeline, with Prime Minister Alexis Tsipras eager for the 8,000 jobs it will bring to the country’s crisis-hit economy.

The Commission Vice-President came back to the question, saying that what is important is, if there is a commercial interest in building the pipeline, that all basic principles of the EU strategies are respected: diversification, respect for EU law, respect for EU public procurement rules, respect for EU environmental policies, issues that proved to be problematic for the initial attempt to bring the South Stream project to life.

Šefčovič also mentioned that it was not the EU, but Russia that cancelled the project.

Despite the many “steams” announced over the last year, Šefčovič said he saw only one come to life, which is the Southern Gas Corridor, which has the support of the EU.

“Everything else we would need to look at once it becomes more concrete,” he said.

Background

The South Stream pipeline was designed to carry 63 bcm/y of Russian gas across the Black Sea to Bulgaria, and via Serbia, Hungary and Slovenia, to Italy. Its main shareholders were Russia’s Gazprom, and Italy’s ENI.

On 1 December 2013, Russia scrapped the South Stream pipeline project to supply gas to southern Europe, without crossing Ukraine, citing EU objections, and instead named Turkey as its preferred partner for an alternative pipeline.

Russia scrapped the South Stream pipeline project to supply gas to southern Europe, without crossing Ukraine, on Monday (December 1), citing EU objections, and instead named Turkey as its preferred partner for an alternative pipeline, with a promise of hefty discounts.

After Russian-Turkish relations deteriorated over the downing of the Russian warplane at the Syrian border on 24 November 2015, word is out that Russia may bring gas at the Bulgarian shore, just as under the South Stream project.

Just before the start of the two-day EU summit today (17 December) Bulgarian Prime Minister Boyko Borissov revealed his country too had plans to bring Russian gas to its borders - just like Germany, which plans an expansion of the Nord Stream pipeline.